Estate Tax Planning for More Substantial Estates
The Unlimited Marital Deduction and Unified Credit
Many people underestimate the value of their estates for estate tax purposes and fail to make the proper plans to minimize the taxes that can reduce the inheritance that finally goes to their beneficiaries.
The unlimited marital deduction makes most transfers between spouses, either by gift or bequest, tax-free. Thus, you may leave your entire estate to your surviving spouse and no estate tax will be due upon your death. However, upon the death of the surviving spouse, estate taxes may be owed if your joint assets exceed the exemption equivalent established in the federal tax code that is applicable in the year of death. This results from a “unified credit” that derives its name from the fact that transfers of property to family members or others will be taxed in the same way, regardless of whether the transfer occurs during life or at death, because of a general unification of the estate and gift tax laws. There may also be certain death taxes payable under state laws that must be considered. Essentially, the marital deduction only defers taxes that still must eventually be paid. Nevertheless, the marital deduction is important as deferring the estate tax liability gives the surviving spouse and family more money for support and investment during the life of the surviving spouse. The surviving spouse may be able to further reduce the impact of the estate tax by making lifetime gifts to family members or through the establishment of a trust and through other estate planning. In addition, it may now be possible for a surviving spouse to use some or all of the unified credit of the first deceased spouse if proper election is made during the administration of that first deceased spouse’s taxable estate.
There are significantly different issues, problems, and opportunities in estate tax planning for married persons and for single individuals. The methods for transferring assets to enjoy the benefits of the unlimited marital deduction and unified credit are many and complex. Our attorney can provide a more in-depth explanation of the many complicated rules governing federal and state estate taxes.
At the Law Offices of Robin S. Gnatowsky, our attorney can help determine the value of your estate and the potential benefits to you and your family of estate tax planning. Contact our Virginia wills and trusts lawyer online or call 804-935-8510 to schedule an appointment to discuss your situation. We help individuals, families and family trusts, charitable organizations, and small and family owned businesses in Virginia, Maryland, Washington D.C., and Florida.
Contact Virginia Wills and Trusts Attorney
Planning for the unexpected can help protect your family’s future. Contact our Glen Allen estate planning attorney online or call 804-935-8510 to schedule a consultation. We help individuals, families and family trusts, charitable organizations, and small and family owned businesses in Virginia, Maryland, Washington D.C., and Florida.